Das Haus

€200,000

Target fulfilled: 100%

Closed

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Das Haus investment opportunity overview

We
offer an opportunity to participate in financing of developement of Das Haus
project in Tallinn. The project is owned by Park Plaza OÜ and is developed by
Novira Capital. The total amount to be raised through Argeld is 200 000
euros.

The
project is located at Pärnu mnt 31, 33, 35 and P. Süda 4 land plots where a
multi-functional, high-quality 8-storey residential building with retail space
is being built. The detailed plan is established, the zero cycle construction
has started and the building permit for the above ground levels is in progress.
Main contractor for the construction is YIT Infra Eesti AS. Capital being raised is
used for development purposes.

Total
construction period is planned to take 18 months. Sales of apartments started
in July 2017 and by today about 2200 m2 of sellable area, equalling 16.5% of
total volume has been realised.

Offered
terms and conditions

Total
investment amount – 200 000 eurot

Interest
rate – 10%

Interest
payments – at the end of Loan term

Minimum
investment amount - 100 euros

Loan
term – 30. september 2019

Loan
type – participation in second ranking development loan

Project
developer

The
land and project is owned by Park Plaza OÜ (register code 11369122), a
company incorporated for the implementation of the
project. Park Plaza has signed agreement with Novira Capital OÜ for the
development, financing, sales, and marketing. The developer has already
accumulated capital of EUR 8,900,000 for the purchase of properties, and
invested ca 900,000 euros to carry out archaeological excavations and design,
and ca 400,000 euros for the 0-cycle construction.

Buildings
and location

The
building being developed is located on four land lots with addresses at Pärnu
mnt. 31, 33, 35 and P. Süda 4. The entire building will be completed during the
development and will have a floor area of approx. 13,200 square meters and a
gross area of ca 28,000 m 2 (ca. 19,750 m 2 of the ground and ca 8 250 m2
underground).Good
spacial overview and description of location is available on Project web-sitehttps://dashaus.ee/

The
architectural competition was held early in early 2016, and architectural
bureau Pluss was chosen as its winner. The architectural office of Meelis Press
is engaged in creating the interior architecture of the building. The cooperation
between renown architects will guarantee considerate solution that take into account
building location as well as the requirements for the modern residential
building.

In
total, buildings will have 4 separate blocks or staircases. On the ground level
will be commercial and business premises that are placed from Pärnu mnt towards
Süda street. Offices will not be built. The majority of the building will have
6-storeys, but the narrower block will have penthouse apartements and reaches up
to the 8 floors. The underground car park is located on two underground floors
and accommodates about 200 cars.

Business
plan

Sellable
area

Total sellable are wo balconies and terraces

13 275

m2

Aparatments

11 928

m2

Commercial

1 347

m2

Average apartement price (w VAT)

3 383

EUR/m2

Income from parking and storages

3 875 000

EUR

Total income from sales

41 500 000

EUR

Sales
plan

There
are a total of 197 apartments in the building and 8 additional commercial areas
on the street level. The largest share of the building is composed of one-bedroom
and two-roomed apartments. One-room apartments are grouped together in single
blocks, mainly on Pärnu mnt side of the building. In order to protect
inhabitants living environment, a short-term rental business is prohibited by
the articles of apartement association. A more detailed overview of Apartments
and building can be found on the project website atwww.dashaus.ee

The
target group for the development is primarily affluent people, who appreciate
the location of the building and the high finishing standard. The two upper
floors include only luxurious penthouse apartments. Family apartments are
planned in the quietest parts of the building. The level price level is
reflects the overall elegance of the entire solution.

According
to sales policy buyer has to first sign contract under law of obligations and
contributes of 15% of the total sale amount. A real right contract will be
concluded upon completion of the building and transfer of premises, at which point
85% of the purchase amount will be paid. The sale of the premises has begun,
the first contracts under law of obligations were signed in July 2017. A larger
marketing campaign began in October 2017, currently 20.5% of the building is sold
and by the end of 2018 it is planned to sell 40% of the entire building.

Competition

The
main competitors are other new developments in the center of the city, the
closest is Tõnismägi Premium, but the most important of them, Rotermann City.
Another key area are the developments between the harbor and the Old Town.
However, in the city center, the development is still relatively small and
demand remains high.

Estimated
total development costs form EUR 24,400,000 (without VAT):

Construction

20 000 000

Construction supervision

90 000

Design and architecture

1 150 000

Archaeological excavations

470 000

Communications &utilities

350 000

Other

2 340 000

Development and construction costs total

24 400 000

In
total approximately 1 300 000 EUR was spent on development by the end of
January 2018, most related to archaeological excavation and design. The start of
construction was January 2018, and the construction period will last 18 months.
The building permit is planned to be received in two parts – currently the underground
construction permit has been issued and above the ground construction
permitting is expected at the end of March 2018. The transfer of real
registered title to apartments and commercial premises to buyers is scheduled
for summer-autumn 2019.

Project
uses of funds:

Acquisition of land

8 900 000

Financing costs

1 500 000

Development and construction costs

24 400 000

TOTAL

34 800 000

Sources
of funds:

Owners funds

8 900 000

Bank loan

17 000 000

Mezzanine financing

5 000 000

Prepayments from clients

3 900 000

TOTAL

34 800 000

Terms
and conditions of the financing

The
loan agreement with the Varahaldusettevõte OÜ has following terms and conditions:

•
total amount EUR 200,000;

•
Interest rate 10% per annum;

•
Term 18 months;

•
Interest payment at the end of the period;

•
Repayment at the end of the period

•
Collateral for the loani s a pledge on loan claim that
is secured by mortgage on development property

•
The borrower has the right to redeem the capital
invested early

Loan
repayment

Repayment of the loan is scheduled by 30.09.2019.

The Borrower has the right to prerepay the loan in which
case the minimum total interest payable must be at least equal to 6 months
interest amount. The planned source of loan repayment of the loan are the
proceeds from the sale of apartments and commercial premises. The developer
does not rent premises.

Collateral

The loan is secured by pledge on loan claim that is
secured with mortgage on four registered immovables at Tallinn, Pärnu mnt. 31,
33, 35 and Süda tn 4 with a total area of 5194m2. The collateral is provided by
Park Plaza OÜ and Graben Holding OÜ.

Risk
matrix

Valmimine

Tururisk

Likviidsusrisk

Maksumuse kuluületus

•

Valmimisega hilinemine

•

Infrastruktuuriga liitumine

•

Turu maht

•

Hinnatase

•

Realiseerimise tempo

•

Cost
overrun. The developer has entered into date and price certain
contract with construction contractor. A tender will be organized for the
selection of the general contractor for the above ground part of construction.
The construction contract will be also based on date and price certain and will
have customary 10% liquidated damages clause secured by bank guarantee. However,
considering the increase in construction prices, the cost overrun can be
considered a risk.

At
the moment, it is not possible to provide precise and final assessment of the
cost overrun risk as the above ground construction has not been permitted and in
the process changes may be made into technical solutions.

Delay
in completion.For the developer, the risk exists, but for the
lender, and for Argeld's investor, this risk is lower because the co-financed
loan could be repaid from bank loan or client prepayments.

Market
size.The city center is Estonia's most active and liquid
real estate market segment. During the first half of 2017 in total 329 new
apartments in the centre were sold. The market for apartements clearly exists
and is able to absorb the planned development, especially considering the
planned long sale period.

Prices.
The average selling price of new apartment in the center of Tallinn was 2887 €
/ m2. The majority of transactions with new apartments will remain at an
absolute price level of € 200,000 or less. Given the relatively large share of
smaller apartments, Das Haus development prices are at an average or slightly above
the average level.

Liquidity and selling schedule.
Taking into account the large number of apartments being sold, achieving the
sales target is one of the possible risks.

Investment
object

Address

Pärnu mnt 33

Project owner

Park Plaza OÜ

Project developer

Novira Capital OÜ

Developer's background

Development project is managed by Novira Capital

Capital raise

Amount to be raised

€ 200 000

Instrument

new loan to Argel platform sister company, secured with pledge
on loan claim, that has mortgage as collateral

Minimal investment

100

Paybacks to Investor

Funds received will be allocated to investors proportionally
according to investment amount

prepayment of loan partly or fully allowed with 60 days notice
in advance

Details of pledged loan
collateral

Collateral

mortgage

Type

residential and business land

Current condition

zero cycle construction ongoing

Total area

Four properties, total area forms 5 194 m2

Land area by property

P 31 2890m2, P33 373m2, P35 1058m2 ja S4 873 m2

Adress

Pärnu mnt 31, 33, 35 ja Süda tn 4

No of cadastre unit

78401:106:1010; 78401:106:0440; 78401:106:0026; 78401:106:0640

Land register ID

16888401; 305701; 24199701; 674601

Estimated bank loan terms and
conditions

Loan amount

applied amount €15 000 000

Bank's name

to be determined

Loan term

applied period 3 years

Interest

estimated at 3,5%+EURIBOR pa

Collateral

First ranking mortgage

Collateral amount

General practice is to apply 1.3 coefficient to loan
amount

Other conditions

usually subordination of other financing and similar customary
conditions

LTV

Appraisal not available

Information on related parties

Borrower's relation to Argeld

Argeld OÜ controlling shareholders own minority share in the
Borrower, manage development based on contract and have provided unsecured
loan to the Borrower

Previous owner of the claim

The investors counterparty Varahaldusettevõte OÜ is owned by
the parent of Argeld. The ultimate parent of Argeld as well as the
Varahaldusettevõte OÜ is Novira Capital OÜ that also owns Novira Finance OÜ,
the original lender to the Borrower.